MORE than 25,000 new jobs have been created in York in the past decade, despite the demise of the city's manufacturing industry, according to a new report.

Between 1996 and 2004, total employment in York rose from 80,500 to 100,650. Between 1991 and 2001, York's population rose from 172,847 to 181,131.

More than 10,000 new posts have been created in hospitality and distribution, and a further 8,850 in public administration, education and health.

The increases have countered the fall of heavy industry in York, which saw the number of manufacturing jobs in the city fall from 12,200 to 6,800 over the period.

But a skills shortage, including widespread illiteracy and innumeracy, is hindering city employers' attempts to recruit local people.

The figures are contained in a report to City of York Council's shadow executive.

Bill Woolley, the authority's director of city strategy, has prepared an extensive analysis of the transformation of the city's economy over the past ten years, showing how working patterns have changed.

As well as the overall trends, the report shows:

* 24,600 people aged 16 to 60 in York have literacy problems, and 25,000 have numeracy problems.

* In 2005/06, four million tourists visited York, spending £311.8 million.

* Half of Science City York jobs go to local people, and half to people outside York.

* 43 per cent of York's workforce is graduate or postgraduate.

* The Leeds City Region, in which York lies, hopes to create 150,000 new jobs over the next ten years.

Following last year's announcements of mass redundancies at Nestl Rowntree, Norwich Union and British Sugar, the council set up the independent Future York Group, to plot the city's economic future, and chairman Christopher Garnett is expected to publish his report in the spring.

The triple-whammy of job losses last summer followed the loss of the Terry's and Monroe factories and the York Carriageworks. But many new jobs have been created in their place, including on the former carriageworks site itself, where credit card protection firm CPP now employs 1,200 people.

Mr Garnett said: "We are looking at all the information that is available, whatever the source, particularly over what has happened historically in terms of employment in York, and also the prospects going forward."

He said he had not yet read the report, but would do so shortly.

Council leader Steve Galloway said: "This report repeats the information which I presented to partner organisations when the job cuts were announced last year.

"We have known for some time that, despite the city's underlying economic strength, we needed to make further progress in our management of some aspects of the economy.

"The principle question was, and is, whether we have the right balance on the economy and that is why we set up the independent Future York group. They will report late in the spring.

"I would anticipate that they would recognise the strength of the tourism, knowledge, science, financial, business administration and technology sectors of the York economy. They are likely to concentrate on the challenges facing manufacturing and some other specialist functions in the city."

The paper was requested by the council's Labour group leader Dave Merrett, who said the shadow executive wanted to understand what was happening in the York job market.

He welcomed the report: "It is vital that the council works hard with local businesses to ensure there continues to be an adequate supply of good, new jobs for York residents.

"Clearly we need to generate a variety of jobs in new areas of the economy, but also seek to protect existing employees and employment through helping those businesses to meet the challenges of the rapidly changing world."

Tourism: huge success story

THE thriving tourism and hospitality industry has been one of York's biggest success stories over the past decade.

According to the report, the number of people employed in distribution, hotels and restaurants increased from 19,250 in 2004 to 29,350 in 2004 - an increase of 10,100 or 52.5 per cent.

The report also shows how valuable tourists are to York, and a local tourism boss today said business was booming.

Kate McMullen, marketing manager of York Tourism Bureau said: "The 2005/06 Visitor Survey showed that the revenue for tourism increased to £311 million with the average stay rising to 3.28 nights.

"With visitors spending more than ever before, we are seeing more and more new businesses thriving with the openings of new restaurants, bars, shops and guest-houses in the city.

"2007 has already got off to a great start with work beginning on the new Hotel Du Vin and the refurbishment of the Barbican Centre, both due to open later this year.

"It is estimated that tourism is responsible for more than 9,500 jobs in York and we expect that figure to increase over the next three years as we work to achieve a 5 per cent per annum growth in tourism revenue."